THE AFFORDABLE CARE ACT: Overview and Update on

Wisconsin Implementation

November 21st, 2013

Outline • What is the ACA?

• Who is uninsured in Wisconsin?

• Stage 1 ACA: What’s already happened?

• Stage 2 ACA (+ State Changes): What’s coming?

– Health Insurance Marketplace/Exchange

– BadgerCare Plus Changes

– Small Business Options & Large Employer Impact

• Pulling it all together

• Take-away Messages

What is the ACA?

• Stands for “Affordable Care Act”

– AKA “Obamacare”

• Health insurance reform (became law: 3/23/2010)

• Different parts affect different groups of people & there are two main stages – Stage 1 focuses on patient protections

– (ALREADY in effect)

– Stage 2 focuses on expanding coverage – (beginning October 1st, coverage begins Jan. 1st)

BY THE NUMBERS: Who is Uninsured

in Wisconsin?

Uninsured Wisconsinites

Note: Does Not Include Transitioning BadgerCare Adults

Below 100% FPL

100-149% FPL

150-199% FPL

200-299% FPL

300% + 400% +

< $23,550 $23,550 - $35,324

$35,325 -$47,099

$47,100 -$70,650

$70,650 - $94,200

$94,201+

2013 Federal Poverty Levels for a family of 4:

OVER 500,000 WISCONSINITES ARE UNINSURED

Both Rural & Urban Uninsured

STAGE 1 : What Already Happened?

• Outlaws insurance denials based on preexisting conditions for KIDS – (provision extends to adults in 2014)

• Young adults can stay on parents’ policies until they are 26

• Eliminates lifetime limits

• Phases out annual limits (gone in 2014)

• Can’t drop coverage after a person gets sick or for an honest mistake on your insurance application

ALREADY IN EFFECT cont…

• Insurance must spend at least 80% of your premiums on medical care – (rebate checks were due by August 1)

• Double digit premium increases must be publicly reviewed & are subject to approval

• Small business tax credits: Up to 35% back if providing employees health insurance ($40 billion in credits by 2019)

ALREADY IN EFFECT cont…

• Many preventive care services must now also be offered by private insurance without co-pay or deductible.

• Includes things such as: – Mammograms, blood pressure screenings, many

cancer screenings, immunizations, diet & losing weight, quitting smoking, etc.

– Full list at www.healthcare.gov

• Over 1.1 million Wisconsinites already benefiting!

ALREADY IN EFFECT cont…

NO major Medicare changes, just enhancements:

• Preventive services such as checkups & screenings with no Part B co-pay or deductible.

• 50% discount on brand-name drugs when you hit the “donut hole” coverage gap.

• Solvency of Medicare extended through efficiencies, fighting waste, prevention, ending subsidies to insurance companies.

– Note: Medicare Advantage Enrollment Up 10% from 2012

ALREADY IN EFFECT cont…

Key parts of the health care law

go into effect on January 1, 2014

to help expand coverage

STAGE 2 : Beginning NOW (Individual Mandate & Marketplace)

Individual mandate BEGINS in 2014:

• This penalty will be assessed retrospectively when an individual files taxes for the year.

Exemptions: No Filing Requirement because income is too low, Short coverage gap, unaffordable coverage options (more than 8% income), No MA expansion in your state, religious conscience, health care sharing ministry, Indian tribes, hardship, incarceration, not lawfully present

STARTS JAN 1st, 2014

2014 Greater of $95 per adult, or 1% of taxable income.

2015 Greater of $325 per adult, or 2% of taxable income.

2016 Greater of $695 per adult, or 2.5% of taxable income.

Post 2016 Penalty increases annually based on a cost of-living adjustment.

Individual mandate BEGINS in 2014 in concert with:

• Preexisting condition exclusions outlawed for everyone, no discriminatory practices, like gender rating. • Only age, location & smoking status can affect rate • HIRSP ending March 31st, 2014

• Expansion of Medicaid (BadgerCare). • In WI this expansion is only for childless adults up to 100% FPL

• Creation of competitive health insurance marketplace (exchange).

• Individual tax credits to help middle class pay for insurance in exchange.

• Cost-Sharing assistance to help lower-income individuals/families on exchange pay for their healthcare.

• Increase small business tax credit to up to 50%.

STARTS JAN 1st, 2014 cont…

Essential Health Benefits (EHB) • Minimum benefits for Medicaid, non-group and small

group plans in and out of exchanges

• 10 Categories in the ACA: i. Ambulatory patient services

ii. Emergency services

iii. Hospitalization

iv. Maternity and newborn care

v. Mental health and substance use disorder services, including behavioral health treatment

vi. Prescription drugs

vii. Rehabilitative and habilitative services and devices

viii. Laboratory services

ix. Preventive and wellness services and chronic disease management

x. Pediatric Services, including oral and vision care

• Wisconsin’s default plan in 2014 & 2015 is: United Healthcare Choice Plus

– This will be reassessed in 2016!

• EHB does NOT apply to large group employer plans

STARTS JAN 1st, 2014 cont…

Obama says insurers can continue to offer

existing non-compliant plans to existing

customers in 2014

Creation of a Marketplace for individuals and small businesses (SHOP):

• Achieves efficiencies by pooling into larger groups.

• Financial Assistance available for most

• Apples to apples comparison, chose private insurance based on price, quality, coverage (4 precious metal tiers).

• Members of Congress will be required to purchase their health coverage through the Exchange.

STARTS JAN 1st, 2014 cont…

Plan Tiers:

PLAN TIERS IN MARKETPLACE

Plan Level Actuarial Value Meaning the plan is:

Platinum 90% Expected to cover 90% of

the cost of benefits on average

Gold 80% Expected to cover 80% of

the cost of benefits on average

Silver 70% Expected to cover 70% of

the cost of benefits on average

Bronze 60% Expected to cover 60% of

the cost of benefits on average

*People under 30 and some people with limited incomes may buy what is called a "catastrophic" health plan. It protects you from very high medical costs.

• Must be used within the Marketplace

• Must be ineligible for government-sponsored coverage or affordable employer-sponsored insurance.

• Available for incomes between 100% FPL - 400% of FPL

• Subsidy = Cost of 2nd lowest Silver Plan minus Premium based on income/poverty

FINANCIAL ASSISTANCE IN MARKETPLACE Premium Tax Credit (subsidy)

• Must be used within the Marketplace

• Must be ineligible for government-sponsored coverage or affordable employer-sponsored insurance.

• Helps with out-of-pocket expenses like co-pays, co-insurance, deductibles

• Must be on a SILVER plan to get this assistance

• Available for incomes between 100% FPL - 250% of FPL

Cost-Sharing Assistance

Credit calculator: healthreform.kff.org/SubsidyCalculator.aspx

Calculator estimates that a 40 year old with family of four, making $60,000 would:

• Have a premium of $12,130 for the year

• With a tax credit of $7,193

• Leaving the family with $4,937 to pay ($411/month)

MARKETPLACE CALCULATOR

• $6,350 for individual

• $12,700 for families

Maximum Out-Of-Pocket (for all plans unless you get cost-sharing assistance)

State-Based Decisions

BadgerCare Changes….

BadgerCare Coverage: NOW

Source: Community Advocates Public Policy Institute

BadgerCare Coverage: FUTURE

Source: Community Advocates Public Policy Institute

THESE TWO CHANGES

DELAYED UNTIL APRIL 1 !!!

NOT subject to tax penalty for not having insurance starting in 2014 & beyond

Insurance/Coverage Options Include:

• Tribal Health Programs/Indian Health Service

• Medicaid/BadgerCare Plus

• Private Health Plan bought in the Marketplace

MEDICAID:

• Under MAGI rules, all of the income form Tribal Per Capita payments from gaming revenue are counted as income (used to be a $500 per month disregard).

• Tribal members are exempt from paying BC+ premiums and co-pays. To receive these exemptions, verification of tribal membership or descent from a tribal member is required (tribal enrollment card, document issued by tribe, tribal census document, medical record card from Indian health care provider).

MARKETPLACE:

• IF a member of a federally recognized tribe, you do not have to pay out-of-pocket costs like deductibles, copayments, and coinsurance if your income is below 300% FPL (around $70,650 for a family of 4)

• Can enroll in Marketplace health insurance any month, not just during the yearly open enrollment period.

• If enrolled in a private health insurance plan through the Marketplace, can get services from IHS and/or from providers on the Marketplace plan.

AMERICAN INDIANS & ALASKA NATIVES MARKETPLACE COVERAGE

MAGI = Modified Adjusted Gross Income

• This is how income is determined for Medicaid/BadgerCare & for purposes of the Premium Tax Credit (PTC) and cost-sharing eligibility on the Marketplace

• HOWEVER, BadgerCare and the Marketplace do not make the same determination!!!

Marketplace will determine MAGI for the household:

Adjusted gross income (AGI, as defined by IRS)

+ excluded foreign income

+ tax exempt interest

+ non-taxable social security benefits = MAGI

HOUSEHOLD SIZE HAS A HUGE IMPACT ON INCOME DETERMINATION

• Household size based on expected federal filing status

The Wonderful World of MAGI

Source: Center on Budget & Policy Priorities

Household for PTC = individuals for whom a taxpayer claims a deduction for a personal exemption • Self and spouse

o (note: married couples must file together in order to get PTC or cost-sharing assistance)

• Dependents, which includes children and other individuals (elderly parents, etc)

Household for MA/BC+ are based on each individual applicant and expected filing status • If not filing taxes, then Medicaid relationship rules apply

Comparing MAGI for Medicaid & Marketplace

The Wonderful World of MAGI

Medicaid Marketplace (Premium Tax Credits)

• Household size does not always equal tax unit

• Individual determination of household – may vary across family members

• Household equals tax unit

• Members of tax unit have same household size

Source: Center on Budget & Policy Priorities

The Wonderful World of MAGI: Example

Marketplace (Premium Tax Credits)

Medicaid

Dan 3 (Dan, Drew & Mary) 3 (Dan, Drew & Mary)

Jen 1 (Jen) 1 (Jen)

Drew 3 (Dan, Drew & Mary) 4 (Dan, Drew, Mary & Jen)

Mary 3 (Dan, Drew & Mary) 4 (Dan, Drew, Mary & Jen)

Source: Center on Budget & Policy Priorities

Example: Non-Married Parents • Dan and Jen live together with

their two children, Drew & Mary

• Dan and Jen both have income • For taxes, Dan claims the

children, Jen files on her own

HOUSEHOLD SIZE:

Key parts of the health care law

go into effect on January 1, 2014

to help expand coverage

STAGE 2 : Beginning NOW (Employer Responsibility & SHOP Exchange)

Small Businesses & ACA

WHAT IS THE SHOP EXCHANGE? • SHOP: Small Business Health Options Program

• Online health insurance marketplace for small businesses

• All plans include Essential Health Benefits

• Small business owners control the coverage offered to employees

• Small business owners decide how much to pay toward an employee’s premium

• You may qualify for a tax credit to offset your costs of providing insurance to your employees

DOES MY BUSINESS QUALIFY TO USE THE SHOP EXCHANGE?

Do you employ at least one person?

YES NO

If you are self-employed with no employees, you can get coverage through the individual Marketplace, but not through SHOP.

Do you employ 50 or fewer FTEs?

YES

Your business is eligible for SHOP. You can enroll directly through SHOP at healthcare.gov or through your insurance broker. (If you get insurance through the SHOP, you must offer it to all employees who work 30 hours per week or more)

NO

Employer Shared Responsibility: If you have 50 or more FTEs, talk with your insurance broker or tax preparer about Employer Shared Responsibility provisions that will take effect in 2015

DOES MY BUSINESS QUALIFY FOR TAX CREDITS?

• Can be for-profit businesses or a non-profit

• Must have fewer than 25 FTEs • FTE = 40 hours per week

• changes to 50 employees in 2014

• Must pay at least 50% of employees’ premiums

• Employees’ annual wages must average to be no more than $50,000

• Beginning in 2014, tax credit is available only for plans purchased through the SHOP

LARGE EMPLOYERS & ACA

Start

At least

50 FTEs?

No penalty for small

businesses

No

Yes

Coverage offered?

No $2,000 penalty* per FTE (minus

first 30)

Yes

Does the coverage pay

for at least 60% of health expenses AND

does every employee pay less than 9.5%

of family income for

the coverage?

Yes

Those employees can buy FFM coverage and

receive a subsidy. Did that occur?

No

No penalty

$3,000 penalty* for each receiving

a subsidy (up to a

maximum of $2,000 per employee minus first 30)

Yes

Yes

Source: ACA, and adapted from Kaiser Family Foundation

* The penalty is annual and increases with the growth in insurance premiums.

Those employees can buy FFM coverage and

receive a subsidy. Did that occur?

Source: Community Advocates Public Policy Institute

Decline in Employer-sponsored Insurance

(CPS data for non-elderly population: 2000 to 2011)

PULLING IT ALL TOGETHER

WI INSURANCE FLOW CHART TRICARE

Military

VA Some Veterans

Medicare Seniors and

SSDI

Individuals and Self-Employed

Small Groups 1-50 FTEs

Large Groups 50+ FTEs

Insured Products

HMOs PPOs FFS Etc.

Providers Doctors

Specialists Hospitals

Clinics Rx Drugs

Etc.

Insured

Government Coverage

Private Coverage

Individual

Marketplace

SHOP Marketplace

Grand-Fathered Plans

Medicaid < 100% of FPL,

EBD, SSI, Pregnant Women & Children

Uninsured

Exempt

Self-Insured

Employer Source: Community Advocates Public Policy Institute

Future of Insurance in WI (*For those without Employer Sponsored Insurance option)

Pregnant

Women

Children Parents &

Caretakers

Childless

Adults

15 or older

Family Planning

Only Services

(FPOS)

Elderly or

Disabled

0-100% FPL BadgerCare

No premium

Basically No

Changes (some small tweaks

that should make

more people eligible)

NO

CH

AN

GES

100-200% FPL

BadgerCare No premium

BadgerCare

No premium Marketplace

with tax credit &

cost-sharing subsidy (up to 250% FPL)

200-250% FPL BadgerCare

With premium

250-300% FLP Marketplace

with tax credit

300-400% FPL Marketplace

with tax credit (up to 400% FPL)

400% + FPL Marketplace

with no tax credit

DRAMATIC DROP IN UNINSURED

32 million Americans will gain coverage

Source: Congressional Budget Office

ACA Prevention & Public Health Fund

The ACA authorizes $15 billion over 5 years for “expanded and

sustained national investment in prevention and public health

programs to improve health and help restrain the rate of growth” in

health care costs. It has never been fully funded by Congress.

Wisconsin has received more than $18.3 million in funding:

Community Transformation Grants $5,897,000

Tobacco Use Prevention $79,000

Obesity Prevention and Fitness $683,000

Access to Critical Wellness and Preventive Health $782,000

HIV/AIDS Prevention $96,000

Public Health Workforce $5,265,000

Detection and Response Capacity $1,520,000

Public Health Infrastructure $2,953,000

Health Care Data Analysis and Planning $1,100,000

Source: CBO & Community Advocates Public Policy Institute

October

• (Oct 1) Open Enrollment Begins

November

• (Nov 18) DHS will begin processing applications using the new income eligibility standards

• (Nov 23) DHS will begin notifying members of definite coverage changes effective Jan. 1, 2014

December

• (Dec 15) Individuals need to enroll in a plan and pay the premium if they want their coverage to begin on January 1

January

• (Jan 1) Marketplace coverage starts

March

• (March 31) Open enrollment for the Marketplace ends, HIRSP ends, BadgerCare Changes take effect

Relevant Timeline

KEEP CALM….and…

How do we help?

All insurance plans will have to cover doctor visits,

hospitalizations, maternity care, emergency room care,

and prescriptions.

You might be able to get financial help to pay for a

health insurance plan.

If you have a pre-existing condition, insurance plans cannot deny you coverage.

All insurance plans will have to show the costs and what is covered in simple language

with no fine print.

Four Key Messages to Reach Most Uninsured

One of these = top message

for 89% of population

Source: Enroll America, November 2012

New categories of “Enrollment Support” created by ACA

• Certified Application Counselors

–CMS certification of CAC Organizations

–OCI training • Government entities and tribes exempt!

• Navigators

– Federal grant

–OCI licensure

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Mobilizers!

What’s the message?

• www.healthcare.gov – When in doubt, go to and refer to healthcare.gov

– Use ACCESS if you’re SURE to be under 100% FPL

– December 15th last day to apply (AND PAY FOR) for coverage starting on Jan. 1

• Federal call line: – 800-318-2596

• USE ACCESS (access.wi.gov) for: – Foodshare, FPOS (family planning), childcare, etc.

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In-Person Assistance

• GO TO www.e4healthWI.org for Wisconsin-based resources, to request a training and to see a Wisconsin enrollment directory

• Localhealth.healthcare.gov

• Direct enrollment assistance:

– Community Health Centers, Libraries, Job Centers, & other locations also offering assistance

Emma Hynes, Health Care Policy Analyst

Wisconsin Council on Children and Families

ehynes@wccf.org

Wiskids.blogger.com

www.wccf.org

608-284-0580 x313

Questions/Follow-up